What was the point in insurance comparison websites again?

We are bombarded by advertisements in all areas of the media, for comparison sites. We are encouraged to use them for everything from finding the cheapest DVD player to picking up the best insurance deal. But how much do we really know about these sites, what they have to gain from us using their services and do we really trust them? Are comparison sites becoming more of a hindrance than a help?

It appears that we are becoming more saavy when it comes to doing our own checking and ensuring we get the best possible deal.

Swinton have released figures recently which show that we are now spending two hours searching for motor insurance compared to a mere one and a half hours last year. In fact, the time we spent searching for insurance online had been dropping by at least 15 minutes each of the previous five years — until this year.

It is obvious that the financial pressures on policy holders is encouraging them to take their time finding the best deal, but could we also be falling out of love with comparison sites?

The British Brokers Association has warned people searching for insurance to be careful to ensure proper cover and not to simply accept the cheapest quote. As comparison sites are often designed to show the cheapest quote first, many people may have fallen into the trap of having less cover than they expected.

Remember, cheap is cheap whether it’s baked beans, car tyres or home insurance. The lowest price insurer will NOT be offering the same cover that the more expensive insurers are.

But surely the comparison sites will give us the best possible quote regardless of the recession – the whole point is that a comparison site checks all the insurers for us. Not true. Some insurers choose not to be listed on comparison sites (Direct Line is a perfect load-mouthed example) and often cite that they can offer cheaper quotes because of this. So for us to be certain we have the best quote, we must still double check by looking at those insurers not on the comparison site. Time consuming to say the least.

While the comparison sites will make a big show of how simple and easy they are to use, by the influx of various comparison sites we end up in the same position we were before — i.e. instead of entering your information in to 5-10 different insurer’s websites, you end up entering them in to 5-10 insurance comparison websites to make sure you’re getting the best price.

Of course the big name insurers pay for the privilege of being on a comparison site and that cost has to be passed to the consumer in some form. Many consumers know this (again, thanks to Direct Line’s constant ranting) and will now come off the comparison site when they’ve selected the best deal and go direct to that cheaper insurer’s website to see if they can’t get the quoted price minus the comparison site’s commission.

So … what was the point of insurance comparison sites again?